(Reuters) -U.S. drugmaker Pfizer (NYSE:PFE) and venture firm Flagship Pioneering on Tuesday said they would invest $100 million together to develop up to 10 new potential drugs for areas including internal medicine, oncology, infectious diseases and immunology.
Flagship, which has incubated biotech companies, most famously Moderna (NASDAQ:MRNA) Inc , and Pfizer will each invest $50 million. Flagship's drug discovery initiative Pioneering Medicines will lead the exploration process.
Paul Biondi, president of Flagship's Pioneering unit and a former top Bristol Myers (NYSE:BMY) Squibb executive, said the partnership will take advantage of Flagship's abilities to develop novel technologies towards bigger disease areas.
Pfizer "has the ability to really pull things from a clinical medical (phase) into commercial perspective. We're excited about marrying that up," Biondi said in an interview.
Under the terms of the agreement, Flagship-backed companies could receive up to $700 million in milestones and royalties upon the successful launch and sale of any of the experimental treatments discovered and developed under partnership. That would be up to $7 billion if the partnership were to develop 10 medicines.
Pfizer, which would gain access to Pioneering's research platform and pre-clinical study resources, would provide funding for the development of each of the selected drugs and have an option to acquire them.
"This collaboration is an exciting opportunity for Pfizer to bring deep scientific expertise and apply our development and regulatory strength to Flagship's diverse portfolio of technology platforms," Pfizer Chief Scientific Officer Mikael Dolsten said in a statement.
Drug developers such as Denali Therapeutics (NASDAQ:DNLI), Foghorn Therapeutics and Sana Biotechnology are some of the other companies backed by Flagship.